Over 320 new private homes sold in a week as rates hit rock bottom

SINGAPORE: New private home sales continued their strong run, with at least 325 homes snapped up over the past week as rock-bottom interest rates and new project launches kept propping up the market.

A report by UBS Investment Research said that more than 200 units at 99-year leasehold Eight Riversuites in Whampoa East were sold during a private preview over the weekend.

The average selling price was S$1,400 per sq ft, after buyers were given a 5% early-bird discount. This is higher than Allgreen's 999-year leasehold Riviera 38, previewed in October last year, which is priced at about S$1,100 per sq ft on average. Allgreen's project, however, is farther from Boon Keng MRT station.

Eight Riversuites' one-bedroom units of about 450 sq ft were priced at about S$600,000 while the two-bedroom units of about 700 sq ft cost about S$900,000.

They made up about 60% of the 862-unit project and were the most popular among buyers, the report added.

“Agents were keen to make comparisons with freehold City Square Residences, which is integrated with a retail mall and located one MRT station closer to the city, where small-format units are enjoying strong rental demand and a heftier price tag of S$1,600 to S$1,700 per sq ft,” it said.

Far East Organization sold another 67 units at 338-unit Seahill in West Coast Link, bringing total sales to 185 units since the 99-year leasehold project previewed at the end of last month. The average price of the units sold was S$1,329 per sq ft.

The developer also sold 34 more units in its other projects like Hillsta in Choa Chu Kang, euHabitat in Eunos and Silversea along the East Coast.

Over at 679-unit Ripple Bay in Pasir Ris, MCL Land said that it sold another 27 homes, bringing total sales to 532 units at an average of S$870 per sq ft.

Buyers have snapped up new private homes at such a blistering pace that the 6,682 homes sold in the first three months of the year set a new quarterly record. Many of these are tiny shoebox apartments of 500 sq ft and less.

PropNex chief executive officer Mohamed Ismail said the sustained sales momentum showed the appetite for new projects in good locations that were priced reasonably remained strong.

He expects demand to remain healthy for the next one to two quarters. - The Straits Times/Asian News Network

Six months free condo living in Lion City

SINGAPORE: A property developer is offering a family the chance to live for free for six months in a fully furnished condominium unit in Kovan.

But it is not really a marketing gimmick to whip up interest in Fiorenza, launched last year, as all but two of its 28 units have been sold.

Rather, it is a test bed of sorts for Koh Brothers, which hopes to gather useful feedback on “lifestyle living”, as opposed to just selling an unfurnished unit.

Touted as a “concept home”, the two-bedder has space-saving, tech-savvy furniture suitable for smaller homes.

Smart features in the fifth-floor unit include a dining table that converts into a coffee table, a foldable bed which can double as a study table, motorised sun shades and multi-room surround sound.

The successful family who will not be obliged to purchase the unit should be a family of three, including a child, and be able to give fair feedback and comments about their experience.

To apply, they will also have to submit a 100-word essay on why they deserve the “best experience in life”.

Utility bills will be paid by the developer but the family will have to bear costs such as cleaning the apartment.

The flat, fitted with everything from a washing machine to cutlery, measures 1,367 sq ft, of which nearly 500 sq ft make up the rooftop garden, leaving about 872 sq ft of indoor living space.

Units at Fiorenza have been sold at an average price of S$1,000 to S$1,100 per sq ft. The “concept home”, with all its furnishings, will cost some S$1.6mil; the unit alone costs about S$1.4mil.

Koh Brothers managing director and group chief executive Francis Kohsaid the idea for the “concept home” was conceived nine months ago.

“It's a passion for us, to improve the living conditions for the dweller ... so that they can experience what is ambience, nice avant-garde furniture, at the same time optimise the space,” he added.

He said the feedback he gathered would be used as tips for future developments. - The Straits Times/Asia News Network

What underpins home demand at developer sales — Ong Kah Seng

APRIL 27 — Recent private home buying in Singapore has focused on developer sales, particularly those for suburban condominiums. The focus is driven by financial considerations and innovative product designs.

Developer sales can be significantly pricier than resale homes in the vicinity but may still be attractive because the buyer “wouldn’t have to pay instantly”. The attraction lies in the progress payment schemes where mortgage financing is effective only when the project is completed, whereas a resale property requires one to commit immediately.

To some extent, therefore, developer sales offer the attractiveness of “instant gratification” where the buyer can already boast about owning a property during the construction stage.

Shoebox apartments, which staged record sales last year, have a special place among buyers who are single. Many such apartments were purchased directly from developers — meeting the preference among the younger, economically active buyers for future payments.

It remains to be seen if prospective buyers of shoebox apartments will be interested in the new developments that will be completed from the second half of this year. For those units which will be completed this year and the first half of next year, the bulk may have been bought without the sellers’ stamp duty and hence may be priced attractively in the resale market.

Special project designs have been successful in wooing buyers, with buyers willing to pay a premium of 10 to 20 per cent to resale properties in the vicinity, depending on the age of the completed properties.

With buyers increasingly discerning and more educated, developers now try to outshine one another amid ample new supply and, as such, have created new genres of properties that are fundamentally different from resale homes.

The individualistic mindset “to settle for only the best” means that well-designed projects will meet the hearts of buyers who have sophisticated expectations. A developer sale also offers a brand new property with a total sense of freshness. The feel and thrill of a brand new home is present in all developer sales, including far-flung properties.

Although the resale property market has been inactive for a while and has only just now begun to stir, it may not permanently lose shine to developer sales. The increased preference for developer sales will lead to a sharper contrast between the two sets of properties. This will allow these two types of properties to better cater to two different profiles of buyers.

Resale properties that are priced attractively will be able to woo buyers who have financing power. Interestingly, such buyers are the ones who ultimately purchase at lower prices. Resale properties can be a long-term investment gem and may allow the investor to top up his overall wealth faster than the rest.

Buyers of fairly new resale properties in convenient locations or tried-and-tested developments can also feel safer than buying new properties in far-flung locations, although many new places may present exciting growth opportunities in the long term.

A persistent dichotomy in the resale and developer segments will mean that resale properties that have average concepts will cater to practical but financially-ready buyers, whereas creatively-designed developer projects will have a role in continual product innovation in Singapore’s mature housing market.

Changes to housing developer rules have just been announced to improve transparency and accountability and enable home buyers to make better informed decisions.

The rules are a good move as they better protect the interest of the buyers, particularly as there are now more private home buyers, and these may include first-timers who do not fully know the property’s specifics in their pursuit of their dream home.

Still, the rules are unlikely to reduce future home-buying interest as it is difficult to discourage a home-seeker who has already psychologically tuned himself into the buying mode. The rules will therefore help to give a final layer of confirmation to the buyers’ decision.

Meanwhile, recent discussions on price sustainability have been on new cooling measures to cope with increased buyers’ interest. But if home buyers’ interest remain strong and this cannot be downplayed, then any measure must be effective in ensuring that such strong buying interest is well considered and lasting, mitigating the possibility of buyers’ remorse. — Today

* Ong Kah Seng is director at R’ST Research, an independent property market research company in Singapore.

* This is the personal opinion of the writer or publication. The Malaysian Insider does not endorse the view unless specified.

S’poreans forfeit option fee on mass market units as cold feet take over

SINGAPORE: Buyers of 107 new private homes had a change of heart last month and returned their units to developers.

The numbers, contained in a report from Goldman Sachs, show that even in a hot market, some people get cold feet. The same report also stated that 100 homes were returned the month before.

That means these buyers have paid an option fee but have chosen not to exercise the option and go ahead to complete the purchase.

When someone buys a new condominium, they put down an initial option fee of 5% to “reserve” the unit.

After that fee is paid, the developer of the project has 14 days or more to issue the sales and purchase documents as well as the title deed. From then, the buyer has three weeks to exercise the option to purchase the unit. In some cases, this whole process could take up to eight to nine weeks.

If the buyer chooses to back out, he forfeits a quarter of the option fee, or 1.25% of the purchase price.That could mean forfeiting S$12,500 on a S$1mil unit, or a S$75,000 for a high-end one costing S$6mil.

The 107 units returned in March could have been bought in either January or February.

Analysts were not surprised by the high number of options lapsing, as the number of options lapsing tends to correlate to the number of sales made. Buyers bought 4,289 units in the first two months of the year.

In March, most of the returned units came from the mass market, but this could be because more projects were launched in the sector.

The Straits Times looked at a sample of 15 upcoming projects and found, for instance, 11 units were returned at the 689-unit Parc Rosewood in Woodlands.

Apartments at the 99-year condominium were sold for a median per sq ft price of S$994.

Watertown, a 992-unit mixed-use development in Punggol, had 17 units returned. Units were sold for a median per sq ft of S$1,341.

Bartley Residences, with average prices of S$1,240 per sq ft after discounts, and The Hillier, priced at about S$1,289 per sq ft, both had nine units returned.

The luxury homes sector, which is in the doldrums, also saw some units being returned.

For example, Skyline@Orchard Boulevard, where an apartment recently went for S$4,442 per sq ft, had one unit returned.

Prices there could easily exceed S$6.5mil, as the smallest unit is 1,744 sq ft in size.

The Scotts Tower also faced one cancellation. Earlier this year, a unit there fetched S$3,567 per sq ft.

Likewise, PropNex chief executive Mohamed Ismail noted that no new cooling measures had been introduced in the market since last December, which meant many buyers could be pulling out because of personal reasons.

“It's a glaring number but there's nothing to worry about. It's common to have a handful of units being returned every month of each project,” he said.

Nicholas Mak, head of research at SLP International Property Consultancy, also noted that the projects with the most units returned Watertown, The Hillier and Parc Rosewood included shoebox units.

“Sometimes, people are under peer pressure' at crowded showflats... They go home and speak to more people and decide not to buy it. They'd rather forfeit the 1.25% than regret buying it,” he said.

Ong Kah Seng, director at R'ST Research, shared similar sentiments, adding that some may have bought in haste. - The Straits Times/Asia News Network 

Surging house prices drive Singapore inflation

SINGAPORE: Singapore's inflation accelerated sharply in March, led by a jump in the cost of cars and housing, suggesting the central bank may tighten monetary policy further when it comes up for review in October.

The city-state's consumer price index (CPI) rose 5.2% in March from a year earlier, the government said yesterday, far exceeding February's 4.6% pace and beating the estimates of all 11 economists polled byReuters.

“Singapore is in danger of losing its low inflation status,” Robert PriorWandesforde of Credit Suisse said in a client note.

“The current episode is the second major' inflation shock Singapore has experienced in the last four years; but what makes this time different from 2008 is that inflation in most other Asian countries remains well contained.”

Headline inflation “could average around 5% year-on-year in the first half before easing gradually in the second half of 2012,” the Ministry of Trade and Industry (MTI) and the Monetary Authority of Singapore (MAS) said in a joint statement.

They said housing would remain the largest contributor to inflation this year as rental contracts were renewed at “considerably higher” levels, especially in government-built HDB apartments, which tend to be rented out to people on lower incomes.

Housing, which rose 9.1% from a year earlier, and transport, which rose 8.6%, were the biggest contributors to inflation in March, data from MTI showed.

Economists noted that inflationary pressures in Singapore had begun to emerge in other categories, particularly those that were more labour-intensive.

“If we do see stronger price pressures, especially from healthcare and education, hinting at greater pass-through of wage costs, then the chances are (MAS) might do something else in October,” said Barclays economist Joey Chew.

The central bank surprised financial markets with its half-year monetary policy statement this month by saying it would let the Singapore dollar appreciate at a slightly faster pace because of persistent inflationary pressures. - Reuters

Singapore home sales to foreigners dive 78pc, says paper

SINGAPORE, April 20 — Sales of Singapore residential properties to foreign buyers tumbled 78 per cent in the first quarter after a government decision in late 2011 to apply a higher stamp duty to prevent the market from overheating, a newspaper reported today.

There were only 293 transactions in the first three months of 2012 compared with 1,358 in the previous quarter, according to a Straits Times report that cited analysts at property broker Dennis Wee Group.

The figure does not include sales to permanent residents, or Singaporean citizens.

Transactions by permanent residents slipped 7.5 per cent while purchases by Singaporeans fell 12 per cent.

New private home sales in Singapore eased in March from February but remained high compared with historical data, indicating continued strong demand for apartments in the city-state despite market-cooling measures.

Singapore home prices fell 0.1 per cent in January-March from the preceding quarter — the first drop in nearly three years — following government measures to discourage speculative demand. — Reuters